Key dates confirmed for UAE's tax refund scheme for tourists

From November 18, an overseas tourist may get a refund of the VAT at Abu Dhabi, Dubai, and Sharjah International Airports.

By Sam Bridge

Mon 12 Nov 2018 05:12 PM

Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and chairman of the Federal Tax Authority (FTA), on Monday set out the implementation dates for phases one and two of the Tax Refunds for Tourists Scheme.

Decision No. (2) of 2018 comprises of seven clauses and stipulates that VAT refund claims shall be provided by retailers participating in the Tax Refunds for Tourists Scheme as of Sunday.

From November 18, an overseas tourist may get a refund of the VAT at Abu Dhabi, Dubai, and Sharjah International Airports. The scheme will be extended to other airports and land and sea ports in the UAE as of December 16.

According to the decision, the FTA may collect fees from overseas tourists applying for the tax refund, namely, an administrative fee amounting to 15 percent of the VAT amount refunded and a fixed fee of AED4.8 for every claim.

The scheme operator then deducts these fees from the total amount to be refunded to the overseas tourist on behalf of the FTA. The maximum cash amount that can be returned to a tourist for a 24-hour period is AED10,000.

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The Decision also stipulates that tax cannot be refunded unless the total value of tax-inclusive purchases is AED250 or more.

Three categories of goods are to be excluded from the Tax Refunds for Tourists Scheme including any goods that the overseas tourist does not have with them once leaving the UAE, goods that were entirely or partially consumed in the UAE and motor vehicles, boats and aircrafts.

The Deputy Ruler also determined five steps that retailers must follow when a customer asks to make a purchase under the Tax Refunds for Tourists Scheme, including conducting the necessary due diligence to verify whether the customer is an “overseas tourist” and that they are in the UAE when making the purchase.

The procedure also calls for determining if the supply was made in a period not exceeding 90 days on the date on which the refund claim is requested. Retailers must also verify that the customer is 18 years ofage or older before issuing them with refund claim.